D. C. Circuit Invalidates Indian Country Air Quality Rule

On Friday, January 17, 2014, the United States Court of Appeals for the District of Columbia Circuit vacated that portion of the Environmental Protection Agency’s (“EPA”) 2011 regulation entitled “Review of New Sources and Modifications in Indian Country,” 76 Fed. Reg. 38,748 (codified at 40 C.F.R. pts. 49 and 51) (the “Indian country NSR Rule”) that purported to authorize EPA to establish a federal implementation plan regulating certain sources in non-reservation “Indian country” nationwide, including non-reservation Indian allotments and “dependent Indian communities.” SeeOklahoma Department of Environmental Quality v. Environmental Protection Agency, No. 11-307 (D.C. Cir. Jan. 17, 2014). The Oklahoma Department of Environmental Quality (“ODEQ”), represented by Modrall Sperling, petitioned the court for review of the Indian country NSR Rule arguing, among other grounds, that EPA was without statutory authority to displace state implementation plans with respect to non-reservation areas of States because EPA failed to make required jurisdictional determinations that such areas were within a tribe’s jurisdiction. The court first rejected EPA’s threshold jurisdictional arguments and concluded that ODEQ had standing to petition the court for review of the Rule and that ODEQ’s challenges to the Rule were neither time barred nor forfeited. On the merits, the court held that, because the Clean Air Act requires a tribe to demonstrate jurisdiction over non-reservation Indian country before the EPA can grant the tribe “treatment as state” status, EPA was similarly required to demonstrate tribal jurisdiction over non-reservation Indian country areas before EPA could itself regulate those areas. The court thus ruled that “a state has regulatory jurisdiction under the Clean Air Act over all land within its territory and outside the boundaries of an Indian reservation except insofar as an Indian tribe or the EPA has demonstrated a tribe has jurisdiction. Until such a demonstration has been made, neither a tribe nor the EPA standing in the shoes of a tribe may displace a state’s implementation plan with respect to a non-reservation area of the state.” The court vacated the Indian country NSR Rule as it pertains to non-reservation Indian country. ODEQ did not challenge EPA’s NRS Rule as it applies to reservation areas.